House Bill 711 would repeal North Carolina’s scheduled phaseout of the corporate income tax by changing the corporate tax rate schedule in G.S. 105-130.3. Under the bill, the corporate income tax would remain in place at 2.25% for tax year 2025, drop to 2% in 2026, then to 1% in 2028, and then be eliminated entirely after 2029. The bill is framed as a revenue-stabilization measure tied to the State’s need to fund long-term recovery from Hurricane Helene while preserving North Carolina’s status as a low corporate-tax state.
The bill’s practical effect would be to preserve corporate income tax revenue for several additional years and delay the full elimination of the tax. It would amend the statute governing taxation of C corporations, while leaving S corporations unaffected, and would apply to taxable years beginning on or after January 1, 2026. If enacted, it would alter the State’s planned tax policy trajectory and increase the amount of corporate tax revenue available to the General Fund compared with the existing phaseout schedule.
The overall sentiment reflected in the bill text is supportive of maintaining a business-friendly tax environment while acknowledging the need for additional state revenue. The findings in the bill emphasize North Carolina’s low-tax reputation and present the change as a temporary adjustment to support recovery efforts, rather than a reversal of the State’s pro-business posture. No committee discussion or recorded votes were provided, so there is no additional evidence of debate beyond the bill’s stated purpose.
The main point of contention likely concerns the tradeoff between tax relief for corporations and the State’s need for revenue. Supporters would likely view the bill as a necessary step to finance disaster recovery and stabilize state finances, while opponents may argue that it delays promised tax cuts and could weaken North Carolina’s competitiveness relative to other states. Because the bill was only referred to the House Rules Committee and no votes or hearings are included, the extent of legislative support or opposition cannot be determined from the available materials.
HB711 would amend G.S. 105-130.3 to slow and ultimately stop the scheduled reduction of the corporate income tax, preserving corporate tax collections beyond the current phaseout timeline. The bill affects C corporations doing business in North Carolina, while S corporations remain exempt, and it would take effect for taxable years beginning on or after January 1, 2026. In state law terms, it changes the corporate income tax rate schedule and delays the State’s move to a 0% corporate income tax rate after 2029.
The bill is presented in a generally pro-business but fiscally pragmatic tone. Its findings stress that North Carolina remains a low-tax state and that the change is intended to support recovery from Hurricane Helene, suggesting a rationale centered on temporary revenue needs rather than a broader tax-policy shift. Because there are no committee transcripts or votes available, the public or legislative sentiment cannot be measured directly, but the bill text itself signals an attempt to balance business-tax competitiveness with disaster-recovery funding needs.
The likely contention is between those prioritizing revenue for hurricane recovery and those favoring the existing corporate tax phaseout. Supporters would argue that delaying the tax cut is necessary to ensure adequate funding for long-term recovery in western North Carolina and to stabilize state finances. Opponents would likely object that the bill undermines a promised tax reduction, could affect business planning, and may reduce North Carolina’s attractiveness relative to other states. No recorded debate or vote data is available to identify specific lawmakers or organized groups taking these positions.